The ECB President Mario Draghi attends a press conference at the ECB headquarters in Frankfurt, Germany, on Oct. 25, 2018. The European Central Bank (ECB) Thursday decided to maintain the key interest rates as well as "enhanced forward guidance" on them for the euro area unchanged. (Xinhua/Luo Huanhuan)
FRANKFURT, Oct. 25 (Xinhua) -- The European Central Bank (ECB) Thursday decided to maintain the key interest rates as well as "enhanced forward guidance" on them for the euro area unchanged.
The Eurozone base interest rate will remain at 0.00 percent, with the marginal lending rate and deposit rate remaining at 0.25 percent and minus 0.40 percent respectively.
The ECB went on expecting that the key interest rates will remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to target levels.
Incoming information showed "somewhat weaker than expected" momentum of growth in the currency bloc, the ECB President Mario Draghi admitted at the press conference, while denying the description of current scenario as "downturn".
The risks surrounding the euro area growth outlook can still be assessed as broadly balanced, however, uncertainties relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent, the ECB reaffirmed as it did over the past few months.
Since the monthly asset purchase has been winding down, and will end by December this year, even if conditional -- subject to incoming data confirming medium-term inflation outlook for the euro area, the ECB will continue to provide significant monetary policy stimulus by the sizeable stock of acquired assets and the associated reinvestments, and by the "enhanced forward guidance".
However, no specific plan for reinvestment has been unveiled so far. "We have not discussed what we are going to do next, will do so when we get the next round of projections." Draghi said, implying that the next ECB staff macroeconomic projections, which is due to be released in December, will be the essential reference.
In response to the controversial Italy's draft budgetary plan, Draghi expressed his confidence about the eventual agreement reached by the European Union and Italy.
"It's a fiscal discussion." Draghi underlined that the ECB will absolutely not play a mediating role.
Speaking of the tough Brexit negotiations, Draghi warned that if the lack of solutions in the negotiations around Brexit continues and remains as the end date gets closer, the private sector itself will have to prepare for a "hard Brexit".
"I would not call it a big financial stability risk, but financial uneasiness," he added.
